Lee Joseph Petitjean, Jr. v. Hibernia National Bank of Lake Charles

NOT DESIGNATED FOR PUBLICATION

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

08-1081

LEE JOSEPH PETITJEAN, JR., ET AL.

VERSUS

HIBERNIA NATIONAL BANK OF LAKE CHARLES

************

APPEAL FROM THE
FOURTEENTH JUDICIAL DISTRICT COURT,
PARISH OF CALCASIEU, NO. 1999-2849
HONORABLE WILFORD D. CARTER, DISTRICT JUDGE

************

JIMMIE C. PETERS
JUDGE

************

Court composed of Ulysses Gene Thibodeaux, Chief Judge, Jimmie C. Peters, and
Michael G. Sullivan, Judges.

AFFIRMED.

Homer E. Barousse, Jr.
Barousse & Craton, L.L.C.
Post Office Box 1305
Crowley, LA 70527-0730
(337) 785-1000
COUNSEL FOR PLAINTIFFS/APPELLANTS:
Lee Joseph Petitjean, Jr.
Angela Colleen Petitjean Leger
Rochelle Denise Petitjean
Larry G. Broussard, trustee of the LP Trust, ACL Trust, and RDP Trust

J. Michael Veron
Bice, Palermo & Veron
Post Office Box 2125
Lake Charles, LA 70602
(337) 310-1600
COUNSEL FOR DEFENDANT/APPELLEE:
Hibernia National Bank

Russell J. Stutes, Jr.
Stutes & LaVergne
Post Office Box 1644
Lake Charles, LA 70602
(337) 433-0022
COUNSEL FOR DEFENDANT/APPELLEE:
Hibernia National Bank

A. J. Gray, III
The Gray Law Firm
Post Office Box 1467
Lake Charles, LA 70602-1467
(337) 494-0694
COUNSEL FOR DEFENDANT/APPELLEE:
Hibernia National Bank

PETERS, J.

The plaintiffs in this matter are Larry G. Broussard, the current trustee of the

LJP Trust, the ACL Trust, and the RDP trust; and Lee Joseph Petitjean, Jr., Angela

Colleen Petitjean Leger, and Rochelle Denise Petitjean, three of the income and

principal beneficiaries of the three trusts. The defendant is the Hibernia National

Bank of Lake Charles,1 a former co-trustee of the three trusts. The plaintiffs brought

suit against the defendant under the Louisiana Trust Code, La.R.S. 9:1721, et seq,

asserting that the former trustee had breached its duty of loyalty to them and that the

trusts had suffered losses as a result of the breach. The plaintiffs appeal the trial

court’s grant of the defendant’s motion for summary judgment dismissing their claim.

For the following reasons, we affirm the trial court in all respects.

SCOPE OF REVIEW

Appellate courts review summary judgments de novo, using the same criteria

that govern the trial court’s consideration of whether summary judgment is

appropriate. Champagne v. Ward, 03-3211 (La. 1/19/05), 893 So.2d 773. The

inquiry is whether there is a genuine issue of material fact and whether the mover is

entitled to judgment as a matter of law. La.Code Civ.P. art. 966(B). “The judgment

sought shall be rendered forthwith if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that

there is no genuine issue as to material fact, and that mover is entitled to judgment as

a matter of law.” Id. The mover has the burden of proving entitlement to summary

judgment. La.Code Civ.P. art. 966(C)(2). However, La.Code Civ.P. art. 966(C)(2)

further explains that if the movant will not bear the burden of proof at trial on the

1
Pleadings in the record suggest that Hibernia National Bank of Lake Charles is now Capital
One, N.A. However, the change of ownership is not pertinent to the resolution of the issue before
us, and we will refer to the defendant as Hibernia National Bank of Lake Charles.

matter that is before the court on the motion for summary judgment, the movant’s

burden on the motion does not require him to negate all essential elements of the

adverse party’s claim, action, or defense, but rather to point out to the court that there

is an absence of factual support for one or more elements essential to the adverse

party’s claim, action, or defense. “Thereafter, if the adverse party fails to produce

factual support sufficient to establish that he will be able to satisfy his evidentiary

burden of proof at trial, there is no genuine issue of material fact.” Id.

DISCUSSION OF THE RECORD

The trusts at issue were established by the Petitjean plaintiffs’ grandparents,

Joseph M. Petitjean and Thelma Broussard Petitjean. The grandparents had two

children, Lee Joseph Petitjean and Emily Petitjean Bell, and amassed a considerable

fortune during their lifetime. Between 1971 and 1974, they established six trusts for

their two children and their eleven grandchildren. The three trusts which are the

origin of the issues in this litigation are the Lee Petitjean Trust, the Lee Petitjean Inter

Vivos Trust, and the Lee Petitjean Investment Trust.

The Lee Petitjean Trust was established by Joseph M. Petitjean in his Last Will

and Testament dated July 7, 1971. He and his wife established the Lee Petitjean Inter

Vivos Trust by a notarial act dated July 28, 1971, and Joseph M. Petitjean established

the Lee Petitjean Investment Trust by a notarial act dated October 1, 1974. In the two

inter vivos trusts, Joseph M. Petitjean and the Calcasieu Marine National Bank (later

to become the Hibernia National Bank of Lake Charles, which will collectively be

referred to herein as “the Bank”) were named co-trustees. Joseph M. Petitjean named

the Bank as the sole trustee of the mortis causa trust. All three trusts designated Lee

2

Petitjean as income beneficiary and designated his five children as the principal

beneficiaries.2

Joseph M. Petitjean died on December 24, 1978,3 and thereafter the Bank

served as the sole trustee of all three trusts. The trusts were modified by judicial

decree such that, when Lee Joseph Petitjean died on December 22, 1997, his five

children became both the income and principal beneficiaries of not three, but nine,

individual trusts. A March 3, 1998 judgment reduced the number to three: the LJP

Trust, the ACL Trust, and the RDP Trust. On July 28, 1998, the Bank obtained

judicial authorization to resign as trustee and, thereafter, delivered the assets of the

trust to Larry G. Broussard, who became the successor trustee effective August 5,

1998.

In paragraphs 16 and 17 of their petition, the plaintiffs asserted that the Bank

breached its duty to them under the trust and/or committed acts of gross negligence

and misconduct in the administration of the trusts:

a) By leasing hunting rights on Petitjean Farms, Inc. for no or
inadequate consideration to only certain beneficiaries;

b) By entering into unfavorable contracts with tenant farmers;

c) By failing to properly manage the drier facilities;

d) By renting assets without adequate payment;

e) Disposing of profitable assets for less profitable assets owned or
controlled by the bank.

In paragraph 18 of their petition, the plaintiffs further asserted that the Bank profited

from a breach of trust in dealing with the beneficiaries themselves by

2
Two of the instruments creating the trusts include provisions in favor of Thelma Broussard,
but those provisions do not affect the resolution of the issues now before the court.
3
It is clear from the record that Thelma Broussard was also deceased at the time of the filing
of this suit, but the record does not specify the date of her death.

3

a) Loans to Petitjean Farms, Inc., which it controlled with
knowledge that it could not repay loans from farm income

b) By failing to communicate to the beneficiaries all the material
facts in connection with the loan to the Bank

c) By charging excessive fees and incurring excessive legal and
other expenses.

They further asserted in their petition that the Bank was aware that Joseph M.

Petitjean had established the trusts to prevent his son, their father, from “dissipating

the entire estate” and that, despite this knowledge, the Bank allowed their father

access to the funds of the trusts, knowing he did not have the funds to repay the

trusts; that the Bank had improperly sold the family home; and that it had failed to

provide them with “the necessary funds to go to college and/or the necessities of life.”

By amendment to the original petition filed September 3, 1999, Larry G. Broussard,

in his capacity as trustee of the three trusts, joined the litigation as a party plaintiff.

Following a hearing, the trial court granted the Bank’s motion for summary

disposition, dismissing the plaintiffs’ claims with prejudice. The plaintiffs now

appeal that judgment, asserting two assignments of error.

OPINION

In their first assignment of error, the plaintiffs argue that the trial court erred

in granting the Bank’s motion for summary judgment because there exists numerous

issues of disputed material fact that preclude a grant of summary judgment.

Specifically, they argue that the following facts are in dispute:

1) Whether Capital One, N.A. (former Hibernia National Bank and
successor to Calcasieu Marine National Bank) breached their duty
of loyalty to the Principal Beneficiaries,

2) Whether the loans made by the Trustee to Petitjean Farms, Inc.,
the principal asset of the Trust, breached the duty of loyalty to the
Principal Beneficiaries,

4

3) Whether the Trustee properly complied with the clear provisions
of the Trust relating to the allocation of assets to the beneficiaries
of both principal and income,

4) Whether the Trustee breached their duty to the Principal
Beneficiaries by making excessive distributions in the form of
cash dividends from Petitjean Farms, Inc., to the income
beneficiaries, thus dissipating the value of the principal asset of
the Trust,

5) Whether the Trustee properly allocated the proceeds of mineral
interests, and other property subject to depreciation, to both
principal and income,

6) Whether the Trustee breached their duty to the Income
Beneficiaries by making loans from the commercial side of the
trustee bank to Petitjean Farms, Inc. the principal asset of the
Trust, that the Trustee was bound by law and by the Testementary
Trust to preserve for the benefit of the Principal Beneficiaries,

7) Whether the Trustee made excessive cash distributions to the
Income Beneficiaries, directly from the Trust, reducing the value
of the Principal Beneficiaries’ interests.

As previously stated, the plaintiffs pursue their claims under the provisions of

the Louisiana Trust Code, La.R.S. 9: 1721, et seq. With regard to a trustee’s liability

to the beneficiaries, La.R.S. 9:2201 provides:

If a trustee commits a breach of trust he shall be chargeable with:

(1) A loss or depreciation in value of the trust estate resulting
from a breach of trust; or

(2) A profit made by him through breach of trust; or

(3) A profit that would have accrued to the trust estate if there had
been no breach of trust.

The Bank agrees that the breach issue is disputed but suggests that, regardless of the

resolution of that issue, the plaintiffs cannot establish any loss or depreciation of the

value of the trusts or loss of profit by any breach of trust. That is to say, the plaintiffs

cannot establish this essential element of their case and, therefore, they cannot be

5

successful at trial. La.Code Civ.P. art. 966(C)(2). In support of its position in this

regard, the Bank introduced copies of the trust instruments themselves as well as

excerpts from the deposition testimony of Richard W. Petrie, Jr., George F. Ballard,

and Michael Terranova.

When asked about the assertions of the plaintiffs’ petition as previously listed,

Petrie, who purportedly has extensive experience as a trust officer in a commercial

national bank, testified that he had nothing to suggest that the trusts lost money

through the Bank’s management actions. Ballard, a Certified Public Accountant,

testified in his deposition that he had been retained by the plaintiffs to compute their

damages. He acknowledged that the plaintiffs would have had no rights under the

trusts prior to their father’s death and said that he had made no loss calculations from

their father’s death through the Bank’s release as trustee. In fact, the only elements

of damages he had addressed at the time of the taking of his deposition were the

interest that accrued on the loans to Petitjean Farms, Inc., and the alleged trustee and

legal fees. All of these, he asserts, arose because of the lack of communication

between the Bank and the beneficiaries. However, he gave no basis for his

conclusion in this regard. Rather, he decided on his own that the plaintiffs should be

able to recover these amounts despite having no single authority to support his

decision.

Terranova, a Certified Public Accountant retained by the Bank, testified that

he reviewed the reports of Petrie and Ballard and could find no causal connection

between any act of the Bank and any direct loss to the trusts.

Once the Bank made a prima facie showing that there is an absence of factual

support for any financial loss suffered by the plaintiffs, the burden shifted to the

6

plaintiffs to show that they could satisfy their evidentiary burden of proof on this

issue at trial. La.Code Civ.P. art. 966(C)(2). In opposition to the motion for

summary judgment, the plaintiffs introduced into evidence excerpts from the

depositions of Petrie and John A. Rodgers, III, a trusts expert. However, neither of

these exhibits include any testimony that the trusts suffered any losses or depreciation

in value, nor lost any profits, nor that the Bank had made a profit by its breach of

trust.

At the hearing on the motion for summary judgment, the plaintiffs’ counsel

argued that at trial their expert witnesses would testify that there were losses to the

trusts amounting to three or three and a half million dollars, but no affidavits or other

documentary evidence supporting this allegation was placed in the record. This

argument by counsel, unsupported by affidavits, depositions, or other factual proof,

is not sufficient to carry the plaintiffs’ burden of showing they will be able to prove

their case at trial. See Suire v. Lafayette City-Parish Consol. Gov’t, 04-1459 (La.

4/12/05), 907 So.2d 37.

Therefore, we find no merit in this assignment of error. Even if we were to find

that the issues raised by the plaintiffs are material factual disputes, the plaintiffs have

not shown that they can carry their burden of proof on the issue of actual loss.

In their remaining assignment of error, the plaintiffs assert that the trial court

erred in refusing to allow them to introduce excerpts of the deposition of Edward K.

Hunter, a Lake Charles, Louisiana attorney who drafted the trusts for Joseph M.

Petitjean. The plaintiffs sought to introduce this deposition testimony to establish

statements made to Mr. Hunter by Joseph M. Petitjean concerning the character and

actions of his children and grandchildren. As the deposition testimony does not

7

address the actual losses allegedly suffered by the plaintiffs, our ruling on the first

assignment of error renders this issue moot. Therefore, we will not address this

assignment of error.

DISPOSITION

For the foregoing reasons, we affirm the trial court judgment granting summary

judgment in favor of the defendant, Hibernia National Bank of Lake Charles,

dismissing the demands of Larry G. Broussard as trustee of the LJP Trust, the ACL

Trust, and the RDP Trust; Lee Joseph Petitjean, Jr.; Angela Colleen Petitjean Leger;

and Rochelle Denise Petitjean. We assess all costs of this appeal to the plaintiffs.

AFFIRMED.

This opinion is NOT DESIGNATED FOR PUBLICATION. Rule 2-
16.3, Uniform Rules, Courts of Appeal.

8